Microsoft and KT invest $1.8 billion in Korean AI and cloud infrastructure

KT joins hands with Microsoft to develop AI models and cloud infrastructure

South Korean telecommunications giant KT said yesterday (October 10) that the two corporations will unveil an AI model specifically designed for the kimchi country in the first half of next year, expected to provide better quality and service than other AI models.

KT CEO Kim Young-shub announced the partnership with Microsoft.

The two companies plan to develop AI models based on GTP-4o, a pre-trained multilingual, multimodal language converter developed by Microsoft-backed OpenAI, and introduce specialized models based on Phi-3.5, Microsoft's small language model (SLM), in the first half of 2025.

“Many companies claim to have the Korean AI model, but that’s just talk. The key to success is to quickly deploy features that users want and recognize. This is not the time to consider efficiency or cost,” KT CEO Kim Young-shub said at a press conference in Seoul when announcing details of the partnership with Microsoft.

KT plans to establish an AI transformation subsidiary with AI and cloud experts in the first quarter of 2025. The unit will provide consulting, architecture and design services for AI transformation.

The South Korean telecom service provider and Microsoft have decided to set up an organization to research AI and cloud technologies next year.

“KT’s AI transformation capabilities are not strong enough, so we need to upgrade them by collaborating with Microsoft,” Kim said.

5X Revenue Growth from AI Conversions

Microsoft and KT joined hands last month to drive AI transformation at the South Korean network service provider through a five-year, multibillion-dollar strategic partnership.

A Microsoft event in Korea.

In July, the two sides agreed to cooperate on AI, cloud and IT to promote AI and cloud innovation in the country.

"The partnership covers all core AI-based ICT technologies. The partnership covers all core AI-based ICT technologies," Microsoft Korea CEO Willy Cho said at the conference, referring to information and communications technology. "This is a practical and solid partnership, long-term research and development, joint engineering, capacity improvement and sales marketing," Microsoft Korea CEO Willy Cho said at the information and communications technology conference.

Through the partnership, KT aims to boost revenue from its AI transformation business, including AI, cloud, consulting and information technology (IT) solutions, to 1.4 trillion won by 2029 from an estimated 269 billion won in 2025.

Focus on small language models

KT has no plans to compete with big tech companies in the large language modeling (LLM) market. "The global LLM market is dominated by leading US corporations," said KT CTO Phil Oh.

According to Data Science Dojo, an American online learning company, Open AI, Google, Meta Platforms Inc., Anthropic PBC and Microsoft are the five largest LLM companies in the world.

KT CTO Phil Oh.

KT is expected to focus on providing customized SLM to enterprise customers by enhancing MI:DEUM, the hyper-scale AI system introduced last year.

The South Korean tech giant will focus on the local AI transformation market in the initial stages, but is also looking at expanding its business to other countries.

KT plans to jointly develop a cloud service with Microsoft specializing in local regulations and security issues for the public and financial sectors in the first quarter of 2025. The service is expected to expand from the business sector to the enterprise by helping companies and organizations ensure a stable cloud environment.

KT is also looking to partner with other companies. "We are not just relying on Microsoft. We will work with Microsoft on what they are good at while leaving the door open to partnering with other companies," Kim added.

The South Korean tech giant plans to hire about 1,000 experts in ICT fields prioritizing AI this year, despite struggling to retain talent.

Source: https://www.baogiaothong.vn/microsoft-va-kt-dau-tu-18-ty-do-la-vao-ai-va-ha-tang-dam-may-han-quoc-192241011160614631.htm